We translate nominal income in any past year into constant, real dollars to:

Question

Quizplus · Accepted Answer

All of the statements are true. Nominal income in the past doesn't account for changes in inflation, which can affect the purchasing power of that income. Converting nominal income into real income allows us to compare the value of income over time and understand how much purchasing power has changed. This conversion also helps us understand what an income in the past would be equivalent to in current dollars.

We Translate Nominal Income in Any Past Year into Constant